For starters, it isn’t a $1500 rental it’s a $1300 rental because of the HOA (and as an investor I have very little control over future increases to this HOA fee)
I prefer using annual rents – $1300/mo X 12 = $15,600/yr
Based on most RE investing books paying 8 to 10 times annual rents is a pretty safe bet
Because of the current market dynamics and the fact that I expect rents to decrease in the future, I would only pay the lower end of this range – 8 X $15,600 = $124,800
Because I know the current state of the market I would try to take advantage of the ability to pay cash so this would be my offer on this property:
$100K cash – 14 day escrow – no contingencies – take it or leave it
